Budget Committee To Recommend No Tax Increase Budget
The Jefferson County Commission will receive a recommended fiscal year 2018/19 budget from the Jefferson County Budget Committee that will include no property tax increase. Despite a deep hole of around $830,000 that faced the committee at their last meeting, committee members approved using funds from the Hospital Reserve Fund to meet the financial needs that usual revenues, like property and sales tax, did not cover. Jefferson County has a $6 million dollar fund balance in the hospital reserve account that comes from lease payments from Tennova to Jefferson County in the amount of $750,000 annually as a part of their agreement with the County and Jefferson City.
The use of these funds has been a point of contention with some County Commission members for several years. While there is no mandate on how the funds must be spent, some Commissioners like Commissioner Beeler of the 10th District, are concerned that they will be needed if the hospital lease is not renewed. Others, like Commissioner for the 4th District, Dr. McGraw, believe that it is highly unlikely, given the financial success of the hospital, that Tennova will not seek to extend their lease and , if not, that another hospital franchise would willing pick up the lease. McGraw, who has done time as Chief of Staff of the hospital, offered the motion to use funds from the Hospital Reserve Fund to balance the deficit in the fiscal year 2018/19 budget. That motion included restoring as much of the usage as possible with roll over funds from the current fiscal year. Though those numbers will not be available until later in the summer, it is estimated that around $250,000 will roll back into fund balance from the current fiscal year. With those funds used to replace hospital reserve funds, the account is still estimated to grow by $160,000.
Opponents of using the hospital reserve fund have questions about where next year’s funding will come from since the annual $750,000 hospital reserve deposit will still be allocated to reoccurring expenses that are a part of the ongoing budget. While neither opponents or proponents of using the funds were happy about the current fiscal situation, some felt that delaying a property tax increase another year was worth allocation of the funds. McGraw question just how much reserve was enough and how can Commissioners be in favor of a tax increase when there is $6 million dollars just sitting, waiting to be used in some manner or another. Jefferson County Finance Director Potts was not asked his opinion on how the budget should be balanced but he has voiced his professional opinion that funds from the hospital reserve would be better spent buying down debt than covering on going expense because the terms of the lease could change when it comes up for negotiation in the next few years.
If the Budget Committee did not go to the hospital reserve fund to balance the fiscal year 2018/19 budget, it is likely that 2% employee raises and increases in non profit funding, including fire departments, would have been on the chopping block; And, even those items would have left around a 2 penny deficit to cover by some means. The fiscal year 2018/19 budget passed the Budget Committee in a split vote and it will go before the full body for approval later in June.
